A title insurance commitment is provided to the policyholder before the title insurance policy is issued. It is important to have a full understanding of your title insurance commitment and adequately read through the document before you officially start your insurance policy.
In this review, we discuss the specifics of your commitment, including precisely defining it, the different components that are included, and more. Of course, it is always best to speak directly with your title company about any concerns or questions you have about your specific title insurance commitment.
What is a Title Insurance Commitment?
A title insurance commitment is a document provided by the title company that contains the terms, conditions and exclusions of your title insurance policy. It also provides a summary of the findings from the title search and examination.
Specifically, it may mention any potential issues that were discovered with the ownership and title of the property. The title commitment is often a vital part of the due diligence and closing process for buyers, sellers and lenders.
In some cases, the title insurance commitment may also outline any conditions that must be met before the title insurance policy is officially issued. For example, the commitment may stipulate that certain premium payments must be met, along with other outstanding issues. The title insurance policy is officially issued once all stipulations established in the commitment are fulfilled.
What are The Different Components Included in a Title Insurance Commitment?
Each section of the title insurance commitment highlights a separate piece of information that is important. You should review all sections of the commitment before your title insurance policy is issued to you. Specifically, there are three schedules that highlight the majority of the information in a title insurance commitment. These schedules are as follows:
- Schedule A
- Schedule B-I
- Schedule B-II
Below is a basic review of Schedule A, Schedule B-I and Schedule B-II of a title insurance commitment.
You can find many important details about your title insurance policy in Schedule A. It provides the general information about the property and your title insurance policy. More specifically, Schedule A generally includes:
- Commitment date
- Policies to be issued
- Interest in the land
- Current owners
- Legal description
Schedule A usually includes the premium to be paid for the insurance policy, along with any specific conditions that are applied to your policy. It is important for buyers, lenders and real estate agents to review the information highlighted in schedule A (including the terms and conditions) before starting the policy to ensure there are no discrepancies.
Schedule B-I establishes any issues with the ownership and title of the property. It also lists any known exceptions that apply. This section usually also includes liens, encumbrances or easements that may affect the property’s value or use (if applicable).
Based on this information, Schedule B-I often includes a list of conditions (requirements) that the policyholder must meet before their insurance policy is issued. It is important to quickly resolve any issues that are outlined in this section to avoid setbacks with the due diligence and closing processes. Often, depending on your title company, there may be a list of steps to help ensure all requirements are met.
Schedule B-II discusses those items in your title insurance policy that are not covered. More specifically, this section of your title insurance commitment discusses the exceptions and exclusions.
Exceptions, in particular, are items that are attached to the property and persist even after the ownership is transferred to the Buyer. Exceptions that are outlined in Schedule B-II may include but are not limited to:
- Conditions and Restrictions (CC&Rs)
- Homeowners association (HOA) rules
- Mineral rights (as reserved in patents)
- Leasehold interests
Certain exceptions can often be eliminated by attaining a release, waiver, affidavit, deed or other official document. Your title company should work with you to ensure you understand all exceptions and exclusions that are included in Schedule B-II and be able to answer any questions you may have.
It is important to have a full understanding of this section (and the title insurance commitment overall) to ensure a smooth transition of the title and home sale.
Contact Mathis Title Company Today for a Reliable Title Insurance Policy
Title insurance can be a valuable part of a home purchase and home ownership. To ensure you receive the protection you need, when you need it, be sure to work with a reputable title insurance company.
At Mathis Title Company, we offer a range of title services, including title insurance. If you are a buyer, seller, lender or real estate agent requiring title insurance (or other title-related services), contact Mathis Title Company online or call 703-214-4020.